UK Home Secretary David Blunkett is to scrap the controversial voucher and dispersal systems as part of a "fundamental and radical reform" of the asylum and immigration system.

In a statement to the House of Commons, Mr Blunkett acknowledged the current system was too slow, vulnerable to fraud and unfair both on local people and on asylum seekers.

I do not intend to tinker with the existing system but to bring about radical and fundamental reform

David Blunkett

Instead a system of smart cards, carrying fingerprints and photographs, would be introduced to provide people arriving in the UK with identification.

Mr Blunkett said the whole way in which asylum applications were processed would be overhauled with unsuccessful applicants removed speedily from the country.

By the same token, those who applied successfully to stay would be speedily integrated.

He said up to 3,000 people would initially be offered places in accommodation centres.

There they would receive full board, access to legal advice and a small cash allowance.

Refusal to stay in the centres would result in a loss of benefits.

Mr Blunkett said: "I do not intend to tinker with the existing system but to bring about radical and fundamental reform of our asylum and immigration policy.

Interests of all

"I believe it will send a message to the rest of the world that the UK is not open to abuse but nor is it a fortress Britain.

"Implementation of my policies will take time, but in time they will work in the interests of us all."

The shake-up has already been welcomed by the Conservatives and the TGWU union - one of the fiercest critics of the voucher scheme, which it called demeaning.

The plans also include the introduction of American green card-style work permits.

It was Mr Blunkett's predecessor Jack Straw who introduced the voucher system for asylum seekers buying food, clothes and other essentials.

'Stigmatising' scheme

Critics, including a number of Labour MPs, were unhappy with practical aspects of the scheme and said it stigmatised those forced to use it.

Mr Blunkett hopes the plan to use induction and reporting centres should speed up asylum applications by focusing legal
assistance and other support services in one location.

Michael Martin...unusual step

The government decided on a review of the dispersal system following the death of a Turkish refugee in Glasgow, a knife attack on an asylum seeker in Hull and protests over detention conditions in Cardiff.

Unlike the existing secure camp at Oakington, Cambridgeshire, the centres were expected to be open.

Tory welcome

Conservative home affairs spokesman Oliver Letwin said the current "mess" was due in great part to Mr Straw.

But he went on to welcome many elements in the home secretary's announcement and said: "The whole country will hope your new proposals will establish a civilised
humane and effective system."